Bear Spread

1. An option strategy seeking maximum profit when the price of the underlying security declines. The strategy involves the simultaneous purchase and sale of options; puts or calls can be used. A higher strike price is purchased and a lower strike price is sold. The options should have the same expiration date.

2. A trading strategy used by futures traders who intend to profit from the decline in commodity prices while limiting potentially damaging losses.

1. You make money if the underlying goes down and lose if the underlying rises in price.

2. A bear spread is created through the simultaneous purchase and sale of two of the same or closely related futures contracts. This is accomplished in the agricultural commodity markets by selling a future and offsetting it by purchasing a similar contract with an extended delivery date.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Bear spread — In options trading, a bear spread is a bearish, vertical spread options strategy that can be used when the options trader is moderately bearish on the underlying security.Because of put call parity, a bear spread can be constructed using either… …   Wikipedia

  • Bear spread — Ein Baisse Spread (englisch bear spread und bearish vertical spread) ist eine Optionsstrategie, mit welcher man auf ein Fallen des Preises des Basiswertes spekuliert. Der Basiswert ist häufig ein Index, es kann aber jeder beliebige andere… …   Deutsch Wikipedia

  • bear spread — In most commodities and financial instruments, the term refers to selling the nearby contract month, and buying the deferred contract, to profit from a change in the price relationship. Chicago Board of Trade glossary Sale of a near month futures …   Financial and business terms

  • bear spread — A position in the bond market that is long in short dated securities and short in longer dated securities; it is intended to take advantage of a fall in commodity or security prices. Compare bull spread …   Big dictionary of business and management

  • bear spread — Fin a combination of purchases and sales of options for the same commodity or stock with the intention of making a profit when the price falls. See also bull spread …   The ultimate business dictionary

  • bear spread — noun One of a variety of strategies involving two or more options (or options combined with a position in the underlying stock) that can potentially profit from a fall in the price of the underlying stock …   Wiktionary

  • spread ribassista —   Eng. bear spread   Strategia operativa che utilizza strumenti derivati per trarre un guadagno da un movimento ribassista del mercato, ad es., con i future un operatore può vendere contratti con scadenza ravvicinata e acquistare contratti a… …   Glossario di economia e finanza

  • Bear (gay slang) — Bear is LGBT slang for those in the bear communities, a subculture in the gay/bisexual male communities and an emerging subset of LGBT communities with events, codes and culture specific identity. It also describes a physical type.Bears tend to… …   Wikipedia

  • Bear Stearns — Industry Investment services Fate Bought by JP Morgan Chase in September 2008 Founded 1923 Defunct …   Wikipedia

  • Bear (gay culture) — Bear is a LGBT slang term that refers to members of a subculture in the homosexual and bisexual male communities and to an emerging subset of LGBT communities with events, codes, and a culture specific identity. It can also be used more… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.